Organizational Design by Soumyaa Srikrishna Organizational Structure, Span of Control, Delegation, Differentiation, Integration, Coordination, Impacts of Technology

1. Organizational
Design
SOUMYAA SRIKRISHNA

2. Definition
“creation of roles, processes, and formal reporting relationships in an
organization.”
“the framework through which an organization aims to realize its
core qualities as specified in its vision statement. It provides the
infrastructure into which business processes are deployed and ensures
that the organization's core qualities are realized across the business
processes deployed within the organization.”

3. Strategy
Structure
Business
Process &
Lateral Links
Reward
Systems
Human
Resource
Management
Galbraith's Star Model of organizational design

4. Strategic Grouping
 Behavior
 Function
 Product or category
 Customer or market
 Geography
 Matrix

5. Characteristics of Effective
Organizational Design
 Simplicity
 Flexibility
 Reliability
 Economy
 Acceptability

6. Importance
 improve communication,
 increase productivity,
 inspire innovation

7. Challenges
 Unworkable job
 Politics
 Over-regulation
 Applying for your job
 Cultural clashes

8. Hierarchy
 Hierarchy refers to the authority
levels of the organizational
pyramid
 œAn authority structure is the glue
that holds the levels of an
organization together
 œMost executives today believe
that fewer layers create a more
efficient, fast-acting, and cost
effective organization
Senior
Management
Middle
Management
Lower Management

9. Span of Control

10. Span of Control
Refers to the number of subordinates who report directly to an
executive or supervisor
The differences in the span of control have direct implications on the
shape of the organization :
 Tall organizations:
 span of control remains constant, or narrow
 œFlat organizations:
 span of control is wide with fewer reporting levels

11. Organizations must find the optimal span of control to be effective
 œNarrow enough to permit manages to maintain control over
subordinates
 Wide enough so that the possibility of micromanaging is minimized
The optimal span of control is dependant on the following factors
 œis the work clearly defined
 œAre subordinates highly trained and do they have access to
information
 œIs the manager highly capable and supportive
 œAre jobs similar and performance measures comparable
 Do subordinates prefer autonomy to close supervisory control

12. Delegation

13.  Delegation refers to the assignment of new or additional
responsibilities to a subordinate
 œDelegation is perhaps the most fundamental feature of
management because it entails getting work done
through others
 œDelegation is important at all hierarchical levels

14. Define the Goal succinctly
Select the person for the task
Subordinate’s view on
selected approach
Provide Resource, Time and
Authority to perform the job
Schedule Check points for
review
Follow through with discussion
of progress at various levels

15. Differentiation & Integration

16. Differentiation
“Differentiation is the process of deciding how to divide the work in an
organization. It ensures that all essential tasks are assigned to jobs and
will be accomplished. “
Dimensions of differentiation:
1. Manager's goal orientation
2. Time orientation
3. Interpersonal orientation
4. Formality of structure.

17. Differentiation contd…
 Horizontal differentiation:
 the degree of differentiation between organizational subunits),
 Vertical differentiation:
 difference in authority and responsibility in the organizational hierarchy),
 Spatial differentiation:
 geographic dispersion of an organization’s offices, plants, and
personnel

18. Integration
 Integration is the process of coordinating the different parts of an
organization.
 Vertical linkages integrate activities up and down the organizational
chain of command.
 Horizontal linkages provide for communication and coordination across
jobs and departments. The flatter the organization, the more necessary
horizontal integration linkages become.

19. Centralization & Decentralization

20. Centralization
 Centralized
organizational structures
rely on one individual to
make decisions and
provide direction for the
company. Small
businesses often use this
structure since the owner
is responsible for the
company’s business
operations.
Decentralization
 Decentralized
organizational structures
often have several
individuals responsible for
making business decisions
and running the business.
Decentralized
organizations rely on a
team environment at
different levels in the
business. Individuals at
each level in the business
may have some
autonomy to make
business decisions.

21. Advantages
Centralized
 Centralized organizations can
be extremely efficient
regarding business decisions.
Business owners typically
develop the company’s
mission and vision, and set
objectives for managers and
employees to follow when
achieving these goals.
Decentralized
 Decentralized organizations
utilize individuals with a variety
of expertise and knowledge for
running various business
operations. A broad-based
management team helps to
ensure the company has
knowledgeable directors or
managers to handle various
types of business situations.

22. Disadvantages
Centralized
 Centralized organizations can
suffer from the negative effects of
several layers of bureaucracy.
These businesses often have
multiple management layers
stretching from the owner down to
frontline operations. Business
owners responsible for making
every decision in the company
may require more time to
accomplish these tasks, which can
result in sluggish business
operations.
Decentralized
 Decentralized organizations can
struggle with multiple individuals
having different opinions on a
particular business decision. As
such, these businesses can face
difficulties trying to get everyone
on the same page when making
decisions.

23. Common Terms

24.  . Standardization is the extent to which work
activities are accomplished in a routine fashion.
 Specialization is the degree to which jobs are
narrowly defined and depend on unique expertise.
 Formalization is the degree to which the
organization has official rules, regulations, and
procedures. An organization may have a formal
structure, but may operate informally.
 Complexity refers to the number of different types of
activities that occur in the organization.

25. Coordination

26. Coordination by Standardization
 When organizations coordinate activities by establishing
routines and standard operating procedures that remain
in place over time, we say that work has been
standardized
 œTo improve coordination, organizations may also use
formalization
 œPresence of rules and regulations governing how people in the
organization interact

27. Coordination by Plan
Interdependent units are required to
meet deadlines and objectives that
contribute to a common goal

28. Coordination by Mutual
Adjustment
 The simplest and most flexible approach to
coordination
 œUnits interact with one another to make
accommodations in order to achieve flexible
coordination
 œThis approach may take more time than other
coordination models

29. Impacts

30. Technology
 “the combination of skills, knowledge, abilities, techniques,
materials, machines, computers, tools, and other equipment that
people use to convert or change raw materials, problems, and new
ideas into valuable goods and services”

31.  Technology can have an impact on how your organization is structured
and how work flows.
 When computer networks became popular, it became easier for people to
work as groups. People did not need to be in the same room, or even the
same building, to be efficient.
 Technology can create positions within your company and it can eliminate
positions.
 When filing is done electronically, there is no longer a need for as many file
clerks as you once had but there is a need for a department of technicians
to maintain and grow the computer network.
 As technology continues to change the function of jobs in the workplace,
the landscape of organizational structure changes with it.

32. Environment
 The strategies available to an organization are
determined by its structure. Different strategies
are better suited to different environments. Thus,
if an organization is to thrive its structure must fit
the business environment in which it develops.
While there are no hard and fast rules, there are
some environmental features that tend to have
predefined effects on the organization.

33. Environments factors
 Degree of Change
 Complexity
 Market Size and Resources
 Coping Strategies

34. Network Organizations

35. Network (Virtual) Organizations
 A network (or virtual) organization performs only certain
core functions and outsources the remaining functions to
other companies.
 Consequently, the network organization is able to focus
on its core competencies  doing what it does best.
 The network organization is able to maintain greater
flexibility in responding to environmental demands.

36. Virtual Organization
Advantages
 Each company in the network
business alliance focuses on its core
competencies.
 Investment risk is spread across the
partners.
 Resources can be used more wisely,
by directing them toward each
organization’s core competencies.
 Each company maintains greater
flexibility to cope with an uncertain
environment.
Disadvantages
 Lack of adequate communication
and coordination between the
network (or virtual) organization
and its partners will undermine the
effectiveness of the alliance.
 The network organization, by
outsourcing significant functions,
increases its risk because it must
rely heavily on other businesses.
 The network organization sacrifices
some degree of control.

37. Questions
© Soumyaa Srikrishna (soumyaasrikrishna@Hotmail.com)